BlackBerry to slash 4,500 jobs

Sep. 20, 2013
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Blackberry to lay off 4,500 employees. / Mario Tama, Getty Images

by Jon Swartz, USA TODAY

by Jon Swartz, USA TODAY

SAN FRANCISCO â?? BlackBerry says it is slashing 4,500 positions in a last-ditch move to recharge the troubled company.

The Canadian company said it would eliminate that many jobs in a bid to cut expenses, a move that comes two days after The Wall Street Journal reported an expected 40% workforce reduction at the device maker.

BlackBerry has failed to invigorate its business despite unveiling a new smartphone line and software in January. The tailspin has prompted company officials to explore strategic options, including a sale.

Troubled BlackBerry said the layoffs will help slash operating expenses by about 50% by the end of the first quarter of 2015.

"It could make them seem a more attractive investment -- to buy or invest or go private. I think all of those are on the table at this point," says IDC analyst Ramon Llamas.

Further clouding its future, BlackBerry reported Friday it expects a net operating loss of $950 million to $995 million in its fiscal second quarter.

"We are implementing the difficult, but necessary operational changes announced today to address our position in a maturing and more competitive industry, and to drive the company toward profitability," BlackBerry CEO Thorsten Heins said in a statement on the preliminary financial results.

BlackBerry shares tumbled 17% to close Friday at $8.73 a share after trading was temporarily halted.

The smartphone maker also disclosed disappointing sales of its devices. "Selling 3.7 million (smartphones) is not a lot. There's more demand for their older devices," says Llamas.